The most recent Royal LePage House Price Survey shows that the average home price in Canada rose by 1.6% year-over-year to $815,500 in the third quarter of this year. Despite this modest annual increase, national home prices dropped by 1.1% compared to the previous quarter, indicating slow summer sales across the country.
However, there are early signs of recovery in the market, with sales volumes starting to rise in September. 38% of regional markets saw positive price growth during the third quarter.
Buyer hesitation despite interest rate cuts
Despite three cuts to the Bank of Canada’s overnight lending rate, buyer demand remains weak, especially among first-time homebuyers and small investors, according to Phil Soper, president and CEO of Royal LePage. First-time buyers are taking a wait-and-see approach due to flat home prices and declining interest rates.
Small investors, who often purchase condos for rental purposes, are also hesitant due to high borrowing costs. Soper believes that both groups will return to the market once property values start rising again.
Buyer readiness + new mortgage rules to boost affordability and unlock opportunities
Royal LePage reports a historic high in total listings on royallepage.ca in September, up 19% from the previous year. New regulations on mortgages and lending practices aim to make homeownership more accessible and stimulate market activity.
Young Canadians are particularly interested in homeownership, with 84% of those aged 18 to 38 viewing it as a worthwhile investment. Consumer confidence is on the rise, with more Canadians optimistic about making major purchases, including homes.
Renewals at higher rates amid softening interest rates
Despite decreasing interest rates, Canadians with ultra-low fixed-rate mortgages from before March 2022 are facing higher monthly payments upon renewal. The Bank of Canada is expected to continue cutting rates, but it may not be enough to alleviate the financial strain for some homeowners.
Regional real estate trends: Uneven recovery
Similar to the real estate boom during the pandemic, the market recovery…
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